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Monday, May 2, 2011

KLCI Stock - IJM / 3336 - 2011 Quarter 3

Company Info
Market Capital (Capital Size)8,376,909,001 (Very Large)
Par ValueRM 1.00

My Analysis
Forecast P/E now(6.2-0.15)/0.3366 = 17.97 (High)
Target Price5.39+0.15 = 5.54 (PE 16.0, EPS 0.3366, DPS 0.15)
DecisionNot interested unless revenue and profit increase more
Revenue increased 14.7% but lower than preceding year corresponding quarter 3.7%, eps increased 9.6% and is second consecutive quarter increasing and also higher than preceding year corresponding quarter 53.1%, cash generated from operating not enough to cover financing activities hence still increased borrowing, liquidity ratio decreased at moderate level now, gearing ratio decreasing at high level now, all accounting periods also long time, CPO price decreasing, highway project
First Support Price6.0
Second Support Price5.5

Research House
AMMB Target Price7.52 (2010-12-30)
TA Target Price6.35 (2011-01-03)
HwangDBS Target Price7.5 (2011-01-11)
HLG Target Price6.2 (2011-02-24)
MIDF Target Price6.48 (2011-02-24)
RHB Target Price6.39 (2011-03-02)
Credit Suisse Target Price8 (2011-03-29)
CIMB Target Price7.7 (2011-04-04)
Maybank Target Price6.5 (2011-04-04)
OSK Target Price6.76 (2011-04-07)
ECM Target Price6.59 (2011-04-20)

Accounting Ratio
Return on Equity6.91%
Dividend Yield2.42%
Profit Margin24.86%
Tax Rate16.36%
Asset Turnover0.2821
Net Asset Value Per Share3.75
Net Tangible Asset per share3.7
Price/Net Tangible Asset Per Share1.69
Cash Per Share1.27
Liquidity Current Ratio2.3689
Liquidity Quick Ratio1.4941
Liquidity Cash Ratio0.7237
Gearing Debt to Equity Ratio1.1555
Gearing Debt to Asset Ratio0.475
Working capital per thousand Ringgit sale94.4%
Days to sell the inventory290
Days to collect the receivables186
Days to pay the payables212

My notes based on 2011 quarter 3 report (number in '000):-
- The Group recorded operating revenue of RM901 million for the current quarter which represents a decline of 3.7% over the corresponding quarter of the preceding year, attributable mainly to the Construction and Property divisions. The decrease in construction revenue was mainly caused by delays in some of the overseas projects while progress at local major projects such as the Grand Hyatt in Kuala Lumpur and Besraya Highway Extension have yet to reach full swing. Similarly, a substantial portion of the Group’s current property portfolio comprised of projects that were still in early stages of construction such as The Light development in Penang

- The Group’s operating profit before tax for the current quarter rose by 39.6% to RM224 million compared to RM161 million in the preceding year’s corresponding quarter following a capital gain of RM63 million from the disposal of a subsidiary in the current quarter

- The Group’s operating revenue decreased by 15.1% while the Group’s pre-tax profit increased by 44.9% mainly due to higher margins achieved by the Group’s Property and Plantation division, higher net foreign exchange translation gains in respect of offshore US Dollar denominated borrowings in the Group’s Infrastructure division and one-off capital gain arising from the disposal of a subsidiary

- The Group recorded a 14.7% increase in operating revenue as all of the Group’s main divisions recorded higher revenues. The Group’s pre-tax profit also rose by 13.0% mainly attributable to the capital gain of RM63 million recorded in the Group’s Property division in the current quarter which exceeded the foreign exchange translation gains of RM31 million that was recorded in the Group’s Infrastructure Division in the previous quarter

- Estimate next 4Q eps after 2011 Q3 result announced = 0.0765*4*1.1 = 0.3366, estimate PE on current price 6.2 = 18.09(DPS 0.15)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.0765*4*1.1 = 0.3366, estimate PE on current price 6.7 = 19.93/15.92 (DPS 0.11)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0662*4*1.05 = 0.278, estimate highest/lowest PE = 20.36/17.3 (DPS 0.11)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.2484*0.9 = 0.2236 (10% drop, exclude foreign exchange gained), estimate highest/lowest PE = 22.58/19.5 (DPS 0.11)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0621*4 = 0.2484 (expecting revenue and profit recover hence no decrease on eps), estimate highest/lowest PE = 20.53/17.43 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.2556, estimate highest/lowest PE = 19.13/16.55 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.271, estimate highest/lowest PE = 25.13/15.68 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.3251, estimate highest/lowest PE = 19.53/16.15 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.2612, estimate highest/lowest PE = 21.06/12.44 (DPS 0.25)

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